No currency conversion fees.
The ability to send funds to anyone with no middle man and no fee (besides the miners).
Also the removal of business and corporate surveillance. Right now Banks, Mastercard, stripe, venmo etc. know everything about you. They can then leverage that information in any way that they want. I don't like that. You run for office on an anti banking or big business platform and amazingly its leaked that you have an ongoing monthly subscription to X.
You said potentially, so I’ll give you this one.
> No currency conversion fees.
This is a function of the market, not the underlying instruments. It’s also not true of most crypto markets, and I’m not confusing the spread with fees at exchanges.
> The ability to send funds to anyone with no middle man and no fee (besides the miners).
No fee (besides the miners) isn’t much different to no fee (except this fee). It’s still a fee, and in the case of Bitcoin, the fee has potential to be prohibitive (and already is for some use cases that it was designed for, e.g. buying a cup of coffee).
> Also the removal of business and corporate surveillance. Right now Banks, Mastercard, stripe, venmo etc. know everything about you. They can then leverage that information in any way that they want. I don't like that. You run for office on an anti banking or big business platform and amazingly its leaked that you have an ongoing monthly subscription to X.
Bitcoin is not anonymous, Monero could be unmasked[1], if you’re leaving a digital footprint, someone will eventually be able to follow it.
The "fees are just too high to buy a cup of coffee" is an old trope that is no longer relevant. One can go download LND 0.5 and use the lightning network to make instant practically free payments for a "cup of coffee" today.
The only thing I'll concede is that it is still in beta, but the question of whether it's going to exist or not is no longer a question.
This presumably is intended to enrich the Bitcoin oligarchs as a passive way to extract rent and wealth on the network simply for controlling existing capital.
This design choice indicates either a comic level of negligence, or intent to shift away from p2p to centralized information control.
only a 1% chance of successfully routing a $67 payment on the lightning network:
https://i.redd.it/twku0lwslz411.jpg
Sending payments using the Lightning Network is cheaper
than the regular Bitcoin network, but suffers from
routing errors and wallet bugs that make it impractical
even for highly technical users. [1]
If you don't want to use an LN hub, then create your own. If you don't have enough money, then raise some capital and start a LN hub business. Hell, create a non-profit LN hub! If you don't want to pay for the service of using other LN hubs, then send a direct payment. Of course, this will cost real money, but you always have that option. If I'm sending money to purchase a house, you can bet I'm going to send an actual transaction and not use the lightning network. For cups of coffee, I just don't need the full decentralization.
Claiming that we will not be able to solve the routing problem on the lightning network is exactly the same as claiming that we won't be able to solve the routing problem on the Internet. Routing is a solved problem, but is a difficult problem to implement, which is why the clients are in BETA.
Your link is bullshit, as I mentioned the network is in BETA. Of course people don't have a bunch of money on the lightning network and can't route large payments like $67. That's because the network is in BETA, and all of the platforms are expressly telling people not to use it for large payments.
Claiming that we will not be able to solve the routing
problem on the lightning network is exactly the same as
claiming that we won't be able to solve the routing
problem on the Internet. Routing is a solved problem,
but is a difficult problem to implement, which is why
the clients are in BETA.
For digital payments I could skip the scam and use Venmo or cash.
I don't get why anyone would bother wasting their money on LN? You have to first buy the Bitcoins which is highly volatile so the risk of losing your money is always possible.
What's the use case? Why bother going though all the trouble and why is there a need to buy someone elses tokens which they basically made for free?
It sounds like you need to convince people to use Bitcoin because you own some and need more people to buy it so you can sell for fiat and make real money. Why else would you try to dismiss the inherent issue with race conditions in decentralized routing networks? Handwaving the flaw by saying "it'll be fixed in the future" is either your ignorance or a lie and an attempt to deceive.
You can't even claim it's the fault of beta software, because it's not even theoretically possible to solve the decentralized routing problem. LN is just another form of paypal/banking.
https://en.wikipedia.org/wiki/Travelling_salesman_problem
Quiet obvious how your scam works.
That said, I have never seen any convincing argument that LN routing can't work in theory... Especially because the lightning network is not completely decentralized on purpose. It works off the idea of "hubs", in which you will connect to a hub, likely one hop, and then the hub will most of the time get to your destination in one or two hops. I'd really like to see someone who claims that we don't have the ability to connect two points in a graph separated by three, or even four, hops. This is just made up nonsense.
The middle part of your comment is just "kids, get off my lawn". Why would anyone need anything besides venmo or cash? Do you mail cash to purchase things online? How many large Internet retailers accept venmo? How many people are implementing micro payments using venmo?
The rest of your comment is just an ad-hominem. And not only is it that, but it's also nonsensical because maybe I have some bitcoins because i'm putting my money where my mouth is.
Also, the travelling salesman problem is bullshit and irrelevant, because LN doesn't need to have the shortest possible route to work, it just needs a workable route.
https://study.com/academy/lesson/attacking-the-motive-fallac...
There are lots of ways that powerful governments can still put their thumb on the scale. US taxes still need to be paid with US dollars, and they can squeeze / regulate the exchanges, or influence, for example, the devs working on bitcoin.
Also, the design of bitcoin is inherently deflationary, which isn't inflation, but has its own set of problems. Saying that nobody is going to have the power to fix those problems isn't a huge selling point.
> No current conversion fees.
Well, I guess if everyone in the world settled on a single cryptocurrency. But that's also true of any other currency in the same situation.
> The ability to send funds to anyone with no middle man and no fee (besides the miners).
What is the importance of not having a middleman? Is it so that you can avoid regulations/fees that you'd otherwise be subject to? To me, this seems like the entire value proposition of cryptocurrency.
> Also the removal of business and corporate surveillance.
This is a good point.
Not many people are using bitcoin to buy pizza any more, because there's a hope that if they just HODL a bit longer they'll be able to buy lambos with the same amount of bitcoin.
That makes bitcoin less useful as a day-to-day currency. If the entire world economy was based on bitcoin, there would be a deflationary spiral and no clear way to fix it. This would be the mother of all depressions.
If you have two forms of money, one of which is inflationary and one of which is deflationary, it becomes rational to hold the deflationary one and spend the inflationary one. Eventually all transactions happen in the inflationary currency, and people forget that the deflationary one is money at all - it just becomes a collectible.
One of the intriguing possibilities of cryptocurrency to me, though, is the idea that a currency could have its inflation rate algorithmically determined so that all market participants know exactly what it'll be worth in the future, irrespective of the actions of any central bank. Extra points if any new money injected goes to people actually transacting with it rather than people holding it as a store of value.
I've long thought the problem with the Fed isn't that it exists or that it increases the money supply, it's that it injects new money at the top of the economy (banks etc.) and measures its effect at the bottom of the economy (consumer prices). That a.) gives a long time lag between the Fed's actions and their effects, which tends to make them overcorrect and b.) means that all sorts of shenanigans can go on in the meantime.
Bitcoin has a higher inflation rate than USD.
Bitcoin inflation rate per annum: 3.87%
USD Current inflation rate for the United States is 2.7%.
>A whole world currency that is potentially immune to
inflation and government manipulation.
Or manipulation from exchanges which generate counterfeit accounts and fake volume in order to steal BTC from the market before they exit scam like most of the exchanges in the past have.
What do you think about Tether and "stable coins" being generated by the billions for free (and then those operators using the counterfit stablecoins to steal BTC/XMR/ETH)?
https://medium.com/@bitfinexed
The common theory is that Bitfinex, Tether, and most of the Cryptocurrency exchanges are operating as fractional reserve banks - and creating more cryptocoins for free, meanwhile "buying" Bitcoin, Monereo, Ethereum, and so on for free because they operate in the dark.
If this is true, it's worse than real central banking, and it's quiet possible Bitfinex and other exchanges have stolen the vast majority of BTC in circulation.
Protections for Customer Funds Are Often Limited or
Illusory. Generally accepted methods for auditing
virtual assets do not exist, and trading platforms lack
a consistent and transparent approach to independently
auditing the virtual currency purportedly in their
possession; several do not claim to do any independent
auditing of their virtual currency holdings at all. That
makes it difficult or impossible to confirm whether
platforms are responsibly holding their customers’
virtual assets as claimed.
https://www.bloomberg.com/amp/news/articles/2018-09-27/crypt...
* Donations to wikileaks
* Payments to gray area businesses like porn and marijuana businesses who can't get credit cards
* Digital payments for unbanked. Yes many don't have bank accounts or credit cards but they have smart phones.
* Payments to/from unstable countries. For example escape Venezuela with your wealth intact or receive aid from outside.
* Cheaper than credit cards (who take 1-3% fees).
* Safer for merchants as it avoids credit charge back fraud.
I was aware that US cannabis businesses have a lot of trouble getting banks to work with them, due to federal level issues, but I never even considered that angle.
But looking at it now, it makes perfect sense, both crypto and cannabis legalization became very mainstream around the same time.
Tho, have any legal businesses actually adopted this. How common is it to have a cryptocurrency payment option at retail dispensaries?
Not always. It would be more expensive than a 3% credit card charge on anything < $20 at current levels (0.62 USD). And if if the network actually gets busy, like it would if bitcoin actually went mainstream, then your max fees per transaction top out around $55.
https://bitinfocharts.com/comparison/bitcoin-transactionfees...
> * Safer for merchants as it avoids credit charge back fraud.
Less safe for consumers as this simply transfers risk to the buyer, who incidentally is the ones choosing how to transact. Why would they prefer Bitcoin over protected credit card transactions that, depending on terms, give a 1-2% cash kickback to the consumer.
It could have easily been prevented by focusing on on-chain scaling instead of waiting for off-chain solutions which aren't ready yet and possibly never will. This is what Bitcoin Cash does and the goal is to never have high fees again. During the latest stress test they processed multiple more transactions than Bitcoin could ever do and fees were still $0.0017. [1]
Credit cards also has a small fixed fee which can hurt merchants you need to take into account when comparing. It's not easy to compare though since there are many different possible contracts.
> Less safe for consumers as this simply transfers risk to the buyer
You're right, that's a negative.
> Why would they prefer Bitcoin over protected credit card transactions that, depending on terms, give a 1-2% cash kickback to the consumer.
Because it might be the only payment method possible. Because the merchants now avoid the credit card fees and can instead pass on the savings to the customer. They are incentivized to do this to avoid credit charge back fraud (which they otherwise eat).
[0]: https://lists.linuxfoundation.org/pipermail/bitcoin-dev/2017... [1]: https://cointelegraph.com/news/bitcoin-cash-stress-test-resu...
And in states where marijuana is legal, cash is the easiest solution for everyone. In states where it is not legal, cash and Venmo seem to be the preferred methods of payment.
In short they're losing a lot of money since they need to go roundabout ways as credit card companies wants to avoid them.
Cash is however not digital, cryptocurrencies are. The term "digital cash" gets thrown around sometimes.
But they're saying the same thing. The only thing that makes money laundering what it is is governments deciding what are good ways to make money.
Cryptocurrencies are similarly not government controlled, but have better characteristics to make them usable as common currencies.
The desire to use cryptocurrencies as currency is not by nature linked to crime, or tax avoidance, etc. just as owning gold does not make you a tax cheat.
I own cryptocurrencies and I paid taxes on my trades, just as I paid taxes on my other capital gains.
It still is used as a currency, particularly in Islamic parts of the world. https://en.wikipedia.org/wiki/Modern_gold_dinar
What people actually mean when they say "not controlled by a government" is that the dollar has lost 98.3% of its value since its peak in 1792–1833. It fell 6.3% in 1834, but stayed at that value (with occasional deviations downwards) until 1932. From 1932 to 1970, it lost 47% of its value, mostly in 1933. In 1971, it became a fiat currency, and fiat currencies are famously prone to inflation; since 1970, the dollar has lost 96.6% of its remaining value.
I'm measuring the dollar against gold here, not just because gold was what defined its value from 1792 to 1970 (and part of 1971), but because gold was the standard of value for international commerce from sometime around 100 BCE until 1971. You could reasonably use a different good as the standard of value, and you'll probably get marginally different results, although a few goods (passenger pigeons, 32-bit multiplications, warships) will give you significantly different results. Gold is relatively convenient for this because of the wide availability and verifiability of its price. Gold's short-term volatility makes it useless for very short-term comparisons, though, by which I mean anything less than 10 years.
When Bitcoin people say they want a "currency not controlled by a government", they mean that they don't want 97% of their savings to evaporate in a mere 50 years because the government decided that printing money was a good way to meet its payroll and pay its bonds.
As fiat currencies go, dollars are actually doing pretty well. Here in Argentina, our peso has lost about 25% of its value each year for the last several years, but this year, it's accelerated; it's lost 50% of its value since April. (It's worth 5¢ today, down from 10¢ in April.) And of course everyone remembers Zimbabwe's hundred-trillion-dollar bills.
Now, you could argue that 5% inflation per year doesn't really impair a currency's use as a measure of value or a medium of exchange, only as a store of value. And you might be right. But there are a bunch of people out there who would love to have a secure store of value that they can also spend, which is why the dollar price of gold more than tripled in 2005–2012. (It's recovered a bit since then.)
I am not going to take a position here on whether providing a potentially safer store of value than dollars is a good thing or a bad thing. It's a thing some people want, and you might not want them to have it. That's okay. I'm just pointing out that they want it, and it's not the same thing as money laundering.
(Historical gold price data from http://onlygold.com/m/Prices/Prices200Years.asp.)
Bitcoin inflation rate per annum: 3.87%
USD Current inflation rate for the United States is Early in Bitcoin history, by design Bitcoin went though a period of hyperinflation where Satoshi and a few users acquired most of the coins in circulation.
Aprox 4.11% of Bitcoin users (addresses) control 96.53% of all bitcoins in circulation.
Also there's a chance that something will make Bitcoin obsolete in the near future - immediately destroying the trade value of Bitcoin, either a new cryptocurrency, a quantum computer or cryptographic breakthrough that would allow theft of BTC private keys or more predictably a bug like what recently happened in the main Bitcoin core wallet client software which allowed a user to inflate the supply of Bitcoins past 21 million and mint more BTC for free.
So if you were truly concerned about long term stability - gold or tangible functional assets would be much safer than software based pet rocks.
https://www.livebitcoinnews.com/cve-2018-17144-the-aftermath...
The obvious worst part of this bug was the inflation
exploit. An attack could create new bitcoins at will,
exceeding the 21 million hard cap limit that is
currently in place. This would absolutely destroy
confidence in not only Bitcoin, but every
cryptocurrency.
In addition, a miner could crash every single node they
are connected to by producing a block with an invalid
transaction in it. Miners are will go out of their way
to connect to as many other mining nodes as possible, so
they receive notifications of blocks faster.
Imagine you’re a miner, hashing away at block #1000.
Another miner, Jim, finds block #1001 and starts
propagating it around the network. However, you’re not
connected to Jim, so it takes an extra few seconds for
you to receive the block. During those few seconds, the
network has moved on and you’re wasting hashpower and in
turn money. You need to receive the new block before you
get started on the next one.
All the miners are highly connected, so if one is
producing client-crashing blocks, many of the larger
miners would be hit.
However, it is more common to measure inflation by the increase in nominal prices of goods, as I did above with gold. And, by this measure, Bitcoin is deflating. It's hard to measure the deflation rate with precision because it's so volatile, but at the beginning of 2011, it was worth 10¢, and now it's US$6600. It's oscillated wildly around the exponential trend line by about a factor of 3 on each side, but the trend line itself is a deflation by about 75% per year (or of 300% per year, if you look at deflation that way.)
Presumably this won't continue forever, as it's more appropriate to tulip bulbs than to a usable currency, but it is certainly quite far from inflation in the usual sense.
The vast majority of the supply is owned by a very small oligarch.
The chances of Bitcoin becoming obsolete or failing catastrphically due to a glitch or bug in the protocol software - like what just happened a few days ago (luckily by someone who desired to fix it, if the bug was found by a malicious actor they would have destroyed the entire Bitcoin ecosystem), the cryptocoin software can not be guaranteed as a safe store of value.
Anyone who "invested" in Bitcoin at the start of this year has lost upwards of 50%, so that would qualify as inflation in your terms. Other cryptocoins have seen losses exceeding 80%-90%.
The way cryptocoins work is by early users dumping their supply onto new users to exit and extract real value from the suckers who then become bag holders, the new users hope to do the same but are at a severe disadvantage to early users who own the vast majority of the supply.
If Cryptocurrency takes off and society accepts it enough to take it as a ordinary medium of exchange, I would imagine it would almost be impossible to prevent people from routing a subset of their transactions through privacy coins.
[0] https://lab.getmonero.org/pubs/MRL-0001.pdf
[1] http://zerocash-project.org/media/pdf/zerocash-extended-2014...
Is this a reference to crypto's distributed ledgers being open to the public?
devil's advocate: what's wrong with Ponzi and Pyramid schemes that are clearly advertised? it's pretty much guaranteed that people will lose money on them (negative EV), but how are they any worse than say, slot machines that are also negative EV?
but OP's comment is about schemes that are embeded into the currency itself
>I don't like it being designed with Ponzi and Pyramid scheme structures embedded.
presumably as some sort of smart contract. in which case every participant should know (or can find out) that it's a ponzi/pyramind scheme.
>and you run into them the more the hype-shallow marketing-level "positive" information hits mainstream media, and you get more people (army of HODLers; Pyramid scheme) trying to sell you with shallow and/or purposeful misinformation/information. That's very different than going to a physical place, to a casino, and playing a slot machine. I'm surprised you don't see that difference yourself?
that's a fair point. "traditional" gambling don't incentivize people to market for them.
I would argue that crypto is actually an investigator's dream, as you can trace transactions instantly through the blockchain without needing to follow the money in multiple jurisdictions, faxes, waiting periods, cooperating with other law enforcement, etc. etc.
[0] https://www.washingtonpost.com/business/2018/09/19/ceo-denma...